Healthy communities: How co-ops can expand care

Key takeaways

• Healthcare co-operatives only feed their profits back to the communities they serve.
• Co-ops lend themselves well to two key global healthcare challenges — radically expanding care, and looking after ageing populations.
• To expand co-ops in a particular geography, they must be embedded into the culture.

Half of the world’s population goes without basic, essential health services and amid the COVID 19 pandemic, it is important to realise that the fight to meet the world’s health demands is a constant struggle.

Europe and North America face a battle to continue to supply healthcare to an ageing population while developing nations attempt to expand healthcare coverage. Democratic organisations are proving to be part of the solution to both of these challenges.

The Co-operative solution

Some 100 million households worldwide enjoy access to healthcare thanks to cooperatives. These are healthcare providers owned by members, which could be healthcare staff, patients or a mix of the two. Crucially, their profits stay within the community they serve.

Jose Perez, secretary-general of the International Health Co-operative Organisation said co-operatives can help improve healthcare without detracting from public options: “rather than competing with public providers, health cooperatives tend to fill gaps complementing the products and services provided by other agents,” Perez said.

Co-operatives’ unique setup as companies that will only feed their profits back to the communities they serve whilst being controlled directly by them gives them a distinct advantage in the healthcare industry, Perez said.

“[Co-operatives] often prioritise addressing the demands of specific stakeholder groups, or the community at large, improving the accessibility of health services for population groups who would otherwise be excluded,” he added.

Expanding Healthcare coverage

This difference compared to state or corporate healthcare may be why co-operatives can help meet the challenges of expanding healthcare coverage — as Brazil’s experience shows.

In the developing world, especially Latin America, due to failing alternatives healthcare co-operatives have prospered. Perez believes that “The origin of a health cooperative often is a need; lack of health services, difficulties in accessing healthcare, market or government failure to care for certain groups”.

Co-operatives could be key to providing additional care for the elderly population

One successful example Perez gives of a thriving healthcare co-op is Unimed do Brasil. He explained how In the 60s, Brazil’s healthcare system “lived a disrupting situation which led to poor care, the commoditisation of medicine and doctors being impeded in their duty of care by profitability criteria”. In response, a group of doctors in Sao Paulo set up a health cooperative that was the seed for the Unimed do Brasil, currently the largest medical network in the country and the largest health cooperative in the world.

This approach has been replicated in many less economically prosperous nations as “In low- and middle-income countries, where market failure is particularly common, especially in rural areas, a cooperative is well suited to solve problems by drawing on its member’s knowledge, commitment and loyalty,” Perez said.

“It becomes, then, an efficient mechanism for development,” Perez continued. “Cooperatives are ideal engines for development since they represent people-centred businesses which empower professionals to do better their job.”

The fact that one of the main strengths of cooperatives is “their ability to adapt to different environments” made them ideal for expanding coverage in the developing world while also providing security for healthcare professionals there.

Co-operatives provide local doctors with the necessary economies of scale, by allowing them to use their collective bargaining power, that allows them to provide for their community, avoiding the flight of talented professionals and helping combat larger market forces.

A good example of this was in Turkey in the 1970s where drug wholesalers would only take payments in foreign currency leading pharmacies to go out of business or rapidly inflate prices. The Association of Pharmacists Co-operatives was set up and allowed small pharmacies to collectively bargain for drug prices to supply genuinely affordable medicine.

Social-healthcare cooperatives offer more opportunities for dignified employment, fostering better salaries and working conditions in the sector

However, Perez is not keen on a “co-operative takeover” of healthcare as “there is no one-size-fits-all solution” and “precisely one of the main strengths of cooperatives, their ability to adapt to different environments” is fitting around other healthcare providers and solving a variety of problems.

Solving the Demographic timebomb

Another such problem that co-operatives are working to solve is that of the ageing population in many wealthier nations. To meet this demographic need, countries could have to increase their healthcare spending. The UK will need to up its spending by 1.12% each year to meet the demographic demand, for example.

Co-operatives could be key to providing this additional care for the elderly population. According to a recent study by the International Labour Organization, among the new business models emerging in response to this demand for care, cooperatives occupy the preeminent role.

Due to the demands and income of this type of job, workers often work in difficult environments for low pay. Social-healthcare cooperatives offer more opportunities for dignified employment, fostering better salaries and working conditions in the sector, while also reducing the proportion of temporary contracts within a job market that is often noted for its insecurity.

In Bologna, Italy, 85% of social care services are provided by co-operatives, owned both by those giving and receiving care. These co-operatives give superior care at 50% of the cost of state programs.

Equally, co-op models for providing care to the elderly have been shown to have greater job satisfaction for carers.

Community Home Care Associates is an American worker co-op providing care for vulnerable citizens. Despite this industry being traditionally low paid with low satisfaction rate and high turnover, of around 40-50%, the co-op has an employee turnover of just 15%.

It’s clear that the co-op model for home social care can deliver improved results on the agency alternative that is becoming prevalent in developed nations and should be utilised to help nations meet the increasing demand for care.

Co-operatives provide solutions to nations’ growing healthcare challenges yet they are still underutilised in nations where co-operatives are not ingrained within the culture. It is evident they could provide part of the solution for healthcare needs globally. — Iwan Doherty

Further reading:

Healthcare cooperatives: A reliable enterprise model for health and wellbeing (UN Report)

(Picture credit: Unsplash)